Mustang Bio Raises $4 Million in Public Offering

Rare Daily Staff

Mustang Bio, a company focused on cell and gene therapies for difficult-to-treat cancers and rare genetic diseases, priced a public offering expected to raise $4 million for the struggling biotech.

In mid-April, Mustang’s shares fell 27 percent after the company said it was reducing its workforce by approximately 81 percent in order to reduce costs and preserve capital due to the fundraising environment and continued uncertainty regarding regulatory review of the sale of the company’s leasehold interest in its cell processing facility located in Massachusetts to uBriGene Biosciences, a wholly owned subsidiary of a Chinese contract development and manufacturing organization.

In the current offering, Mustang Bio issued an aggregate of 16.9 million shares of its common stock, Series A-1 warrants to purchase up to 16.9 million shares of common stock, Series A-2 warrants to purchase up to 16.9 million shares of common stock and Series A-3 warrants to purchase up to 16.9 million shares of common stock, at a combined public offering price of $0.237 per share (or per common stock equivalent in lieu thereof) and accompanying warrants.

The warrants will have an exercise price of $0.237 per share and will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares upon exercise of the warrants. The Series A-1 warrants will expire five years from the date of stockholder approval, the Series A-2 warrants will expire twenty-four months from the date of stockholder approval and the Series A-3 warrants will expire nine months from the date of stockholder approval. The closing of the offering is expected to occur on or about May 2, 2024, subject to the satisfaction of customary closing conditions.

The gross proceeds from the offering, before deducting the placement agent’s fees and other offering expenses payable by the company, are expected to be approximately $4 million. The company intends to use the net proceeds from this offering for working capital and general corporate and other purposes.

Mustang Bio also has agreed to amend certain existing warrants to purchase up to an aggregate of 2.6 million shares of common stock that were previously issued in October 2023 and have an exercise price of $1.58 per share such that the amended warrants will have a reduced exercise price of $0.237 per share effective upon the closing of the offering, will be exercisable beginning on the effective date of stockholder approval of the issuance of the shares upon exercise of the warrants and will expire five years from the date of stockholder approval.